Fundraising regulator: a new dawn for the third sector

The death of pensioner Olive Cooke certainly ?lit the touch paper of fundraising reform as the British media and public expressed their collective outrage at the lengths some charities will go to for donations. Consequently, a number of developments surfaced, culminating in last week’s government-ordered review of the charity sector, led by the National Council for Voluntary Organisations (NCVO).

In its review, the NCVO’s chief executive, Sir Stuart Etherington, described the self-regulation ?of fundraising as ‘no longer fit ?for purpose’. Instead, a new regulatory model was put forward, which has been praised by the fundraising sector.

Defence model

The NCVO’s new regulatory solution is built on a ‘three lines of defence’ model. Initially, trustees would be accountable for a charity’s fundraising activities by ensuring they comply with the law and ethical standards. Where malpractice occurs, the fundraising regulator would have the power to intervene, and where concerns arise, the Charity Commission could be called upon.

The model would impact heavily on the existing bodies that currently oversee the sector. The Fundraising Standards Board (FRSB) would be abolished and a new regulator given the power to resolve all complaints. Active support would be required from the relevant statutory regulator.

The new ‘fundraising regulator’ would not be funded by a membership scheme. Instead, organisations that spend more than £100,000 per annum on generating donations from the public will have to contribute to a sliding-scale levy.

In addition, the Institute of Fundraising (IoF) and the Public Fundraising Association (PFRA) would be merged into a single organisation, with the former transferring ownership of its code of fundraising practice to the regulator.

The creation of a fundraising preference service (FPS) was a notable recommendation from the review, with respondents to the survey expressing frustration at the lack of control over whether a person can be approached for donation requests. The FPS will allow individuals to opt out of receiving fundraising communication, in a similar ?way to the telephone preference service (TPS) that allows the public to avoid unsolicited sales or marketing calls.

Significantly, the new regulator would be given ?greater power to issue stronger sanctions on trustees and CEOs who fail to adhere to the rules and take more responsibility over fundraising activities.

Ongoing reform

Further to the proposed regulatory reform, the ?Charities (Protection and Social Investment) Bill will introduce a new law requiring charities and fundraisers to have a written agreement detailing how vulnerable people are protected. 

Moreover, where a person is deemed vulnerable, a family member or appointed carer can ensure that this person cannot be contacted by registering their status on the FPS. 

The NCVO review added that specific training should be given to all fundraising staff when identifying and dealing with vulnerable consumers. These changes should guarantee the elderly and vulnerable are given more protection and cases like Cooke’s are avoided.

Data protection

Simultaneously, the Information Commissioner’s Office (ICO) is conducting an ongoing review ?of charities’ data-sharing practices. It follows news that personal details of Samuel Rae, a dementia sufferer, were shared up to 200 times and lead to a loss of £35,000 because he did not tick a ‘do not share my details box’ on a lifestyle survey. 

Informed consent is a serious issue for fundraising practices, and the new data protection regulation, which will replace ?the European Data Protection Directive, proposes ‘explicit’ consent be given prior to collecting, storing, and processing personal data. 

This is arguably less severe ?than the IoF’s recent ban on charities’ selling personal data ?to a third party without consent from donors.

Reform of the sector has been long overdue. It should not take tragedies reported by the press ?to stimulate change. Greater accountability is needed for ?those who fail to meet the high standards the sector deserves.

Now, with parliament considering the Charities ?Bill in light of the NCVO’s recommendations, and with the FRSB, IoF, and PFRA working hard to repair their reputations, a safer and more effective approach to fundraising is on the horizon.

Matthew Rogers is an editorial assistant at Solicitors Journal @sportslawmatt matthew.rogers@solicitorsjournal.co.uk